Boat loan interest deduction: the bills, and what they would do

October 1, 2026

The short answer

There is a bill called the No Tax on Boat Loan Interest Act. It is H.R. 7222, introduced by Rep. Nancy Mace (R-S.C.) on January 22, 2026. It was sent to the House Ways and Means Committee, and nothing further has happened. It is not law.

A second, near-identical bill followed in June: H.R. 9537, the Boat Loan Interest Deduction Act of 2026, from Reps. Rudy Yakym (R-Ind.) and Don Davis (D-N.C.). It is also at the introduced stage.

Where the idea comes from

The 2025 tax law signed on July 4, 2025 created a new deduction for interest on car loans. According to the IRS, for tax years 2025 through 2028 you can deduct up to $10,000 a year in interest on a loan for a new car, SUV, pickup or motorcycle whose final assembly happened in the United States. It phases out above $100,000 of modified adjusted gross income, or $200,000 for joint filers. You can claim it whether or not you itemize.

Both boat bills simply add boats to that list. They don't create a separate program.

What the bills would cover

Under the text of H.R. 7222, a boat would qualify only if:

It's new. The original use has to start with you. Used boats don't count.
It's a recreational motorboat, as defined in federal law. Sailboats without an engine and commercial boats are out.
It was assembled in the United States. Final assembly must happen here.
You report the hull identification number on your tax return, the way car buyers report a VIN.

Because the boat bills plug into the car-loan rule, the same limits would apply: $10,000 a year, the income phase-out, and the 2025 to 2028 window. H.R. 7222 would apply to loans taken out after December 31, 2024, so a 2025 or 2026 purchase could qualify if it became law in time.

Who supports it

The National Marine Manufacturers Association backs both bills and points out that about 95% of boats sold in the US are built here. Brunswick and Smoker Craft endorsed the Yakym-Davis bill. No bill has had a committee hearing or vote, and no Senate companion turned up in our search.

What it would mean in dollars

A deduction reduces taxable income, not tax owed. Take a $100,000 boat loan at 8%. First-year interest is roughly $7,900. For a joint filer under the phase-out in the 22% bracket, deducting that would cut federal tax by about $1,700. Higher earners would see less or nothing once the phase-out kicks in.

What you can do today

The bills are not law, so don't sign a loan counting on them. Two things already in the tax code are worth knowing:

A boat can count as a second home. IRS Publication 936 says a boat with sleeping, cooking and toilet facilities can be a qualified home. If you itemize, the interest on a loan secured by that boat may be deductible as mortgage interest, within the usual limits.
Keep your paperwork. If a boat-loan deduction does pass and reaches back to 2025, you'll need the loan statements, the purchase date and the hull ID.

Ask your tax preparer before relying on either.

Sources

govinfo.gov — Text of H.R. 7222 as introduced 22 Jan 2026: adds 'applicable watercraft' (new, recreational, motorboat, US final assembly) to the car-loan interest deduction; hull ID number on return; applies to debt after 31 Dec 2024
govtrack.us — H.R. 7222 status: Introduced, 22 Jan 2026, Rep. Nancy Mace
govinfo.gov — H.R. 9537, Boat Loan Interest Deduction Act of 2026, introduced 30 Jun 2026 (status via GovTrack API: Introduced; sponsor Rep. Rudy Yakym)
dondavis.house.gov — Davis/Yakym release: $10,000 cap, $100k/$200k phase-out, US final assembly; endorsements from NMMA, Brunswick, Smoker Craft
nmma.org — NMMA on H.R. 7222: $10,000 a year, through 2028, phase-out above $100k/$200k MAGI, hull ID required
mraa.com — Marine Retailers Association: deduction would be available without itemizing
irs.gov — IRS: existing car-loan interest deduction, 2025-2028, $10,000 cap, phase-out, US final assembly, new vehicles only, itemizers and non-itemizers
irs.gov — IRS Pub. 936: a boat with sleeping, cooking and toilet facilities can be a qualified home for mortgage interest